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Medical Debt in LA County

Medical Debt Graph
Medical debt is a critical public health issue in LA County, affecting about one in ten adults. This means that approximately 785,000 residents were burdened by medical debt in 2022.
  • The amount of debt is increasing, with estimates of over $2.9 billion in LA County in 2022.
  • The percentage of adults burdened by medical debt is similar to those with type 2 diabetes and greater than those with asthma.
  • Medical debt disproportionately affects families with children, lower-income, Latino, Black, American Indian, and Pacific Islander residents, and people with chronic health conditions.
  • For many individuals and families, medical debt leads to physical and mental health problems, and financial instability. Even with insurance, healthcare costs can add up quickly and lead to significant debt.
  • The debt can make it difficult to pay for basics like food and housing and can lead people to skip or delay needed medical care.
We are using a prevention, population-based method informed and implemented through a wide coalition of community organizations, legal aid groups, health plans, hospitals, physicians, and more.

Preventing and Reducing Medical Debt

Medical Debt in LA County

In June 2023, Public Health published a 202021 Baseline Report and Action Plan on Medical Debt in Los Angeles County that showed the scale and impact of the problem. View report: English I Spanish

Informed by this report, on October 3, 2023, the LA County Board of Supervisors approved the motion Reducing Medical Debt in Los Angeles County though improved data collection and innovative strategies to retire Medical Debt. The motion directed several County departments to work together to address this important issue.

Press release: Board Approves Hahn-Mitchell Proposals to Reduce Medical Debt for Local Families

Medical Debt in LA County
Below are our priority areas and the progress we have made on each.
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Our goal is to collect, and make public, data on healthcare facilities’ debt collection and financial assistance activities. This will increase transparency for healthcare systems, local government, and community stakeholders and allow for tracking progress.
Angeles County Ordinance: Addressing Medical Debt Through Data Collection
On August 6, 2024, the LA County Board of Supervisors approved an ordinance to make changes to Title 11 Los Angeles County Code (Health and Safety Code). The ordinance requires acute care hospitals in LA County to report data on their debt collection and financial assistance operations. This data will help inform improvements in financial assistance policies and practices, identify gaps and challenges, and critically, identify missed opportunities (e.g., when individuals who are eligible for financial assistance are sent to collections). The ordinance was adopted on Sept 10th and data collection is due to start on March 10, 2025.

The ordinance was adopted on Sept 10th and data collection is due to start on March 10, 2025.
Press release: Supervisors Approve Ordinance to Require Hospitals to Report Medical Debt Data
Ongoing Surveillance
Ongoing Surveillance

In January 2024, Public Health published an update to the Medical Debt report. It showed that the medical debt burden in LA County increased by approximately $300 million from 2021 to 2022, to a total of $2.9 billion. View update: English I Spanish.

The report is based on data from the UCLA California Health Interview Survey (CHIS). We have developed additional questions on medical debt to help us better understand sources of medical debt and how the debt impacts LA County residents.

Our goal is to maximize the benefit of existing financial assistance resources for patients, including hospital financial assistance programs. We’re working to simplify and clarify applications, improve eligibility assessment and prescreening, and qualify patients for financial assistance early and for a sufficient duration to reduce the burden on healthcare systems and improve patient experience.
Best Practices in Financial Assistance
The Financial Assistance Best Practices Committee was formed to identify and promote best practices in financial assistance. The committee includes hospital administrators, legal aid providers, community organizations, and healthcare leaders. It collaborates to review financial assistance programs and the latest research to determine and champion best practices. This committee will develop a toolkit to help healthcare providers create fair, transparent, and accessible financial assistance programs. This toolkit will offer actionable steps to enhance communication, simplify eligibility determinations, and improve day-to-day operations, ensuring both patients and healthcare providers benefit.
Model Application and Policy
We’re working with partners to create a plain language model financial assistance application and policy that can be used by healthcare providers and patients throughout the county. We are also developing a web-based portal to facilitate applications for participating institutions.
Use of presumptive eligibility tools to expedite qualification
Presumptive eligibility can be used in healthcare intake and billing workflows to expedite qualification for, and improve access to, financial assistance. To promote uptake of presumptive eligibility among hospitals, we hosted two webinars to showcase the main PE software products in July 2024.
Our goal is to purchase medical debt for pennies on the dollar for low income LA County residents and retire it. This intervention will reduce the financial burdens, improve mental health, and remove healthcare access barriers for hundreds of thousands of residents.
Los Angeles County Board Motion: Pilot Program to Eliminate Medical Debt in Los Angeles County
On June 25, 2024, the Los Angeles County Board of Supervisors approved a motion to allocate $5 million for a pilot program to purchase and retire medical debt for some of our most vulnerable residents. Because medical debt can be purchased for pennies on the dollar, we estimate that this initial funding can eliminate medical debt for at least 150,000 residents abolishing an estimated $500M in debt.

The pilot program is in partnership with the national non-profit Undue Medical Debt (formerly RIP Medical Debt). Our overall goal is to relieve $2 billion of medical debt so that, in addition to long term reform, we can make a meaningful difference in the lives of the 785,000 LA county residents who are burdened by medical debt today. We are hopeful that our philanthropic partners, hospitals, and health plans will be able to complement the County’s effort.

Press release: LA County will Launch Pilot Program to Eliminate Low-Income Residents’ Medical Debt
We work with a strong multi-sector coalition to address medical debt as a systemic health issue and sustain focused action on medical debt.
To address the complex challenges associated with medical debt, Public Health established a diverse coalition of stakeholders representing 45 different organizations. These include consumers, nonprofit organizations, public agencies, policy experts, and healthcare leaders.

Local data on medical debt allows this coalition to understand the issue, offer solutions, and monitor progress for our County. Sustained collaboration will allow us to address the complex challenges posed by medical debt in LA County.
Summit on Medical Debt
Summit on Medical Debt

In April 2024, we convened over 100 coalition partners representing 39 community and healthcare organizations and 11 government agencies for the Los Angeles Medical Debt Summit where participants reviewed recent data and progress and discussed next steps for collective action.

Press release: Los Angeles County Launches Ambitious Plan To Tackle Medical Debt

Working groups have been formed to develop and promote strategies to reduce and prevent medical debt:
  • Decreasing Dental Debt: this group aims to reduce the burden of dental debt and increase financial literacy by developing tools and training modules for consumers, communities, and dental professionals. These focus on increasing transparency and accountability in dental care financing and insurance and promoting low-cost and no-cost dental care resources.
  • Expanding Consumer Resources to Reduce Medical Debt: this group will develop and promote resources for consumers to navigate and prevent medical debt. Examples include training for financial coaches, helpline staff, and community outreach workers; resources such as easy-to-follow guides with clear explanations of consumer rights and protections; and referral resources.
  • Technology to Improve Financial Assistance: this groups aims to harness technologies to improve financial assistance programs and increase equitable access to healthcare. Projects include investigating the features and capacities of presumptive eligibility tools and their integration with electronic medical records systems and developing a web-based portal to expand access to financial assistance applications for patients and healthcare providers.
LA County and Public Health advocate for policy changes that prevent medical debt, reduce its burden, and promote consumer protection and fair billing practices.
In addition to local initiatives, we advocate for state and federal policy changes to mitigate and reduce the impact of medical debt. Several key policies are already in place to protect consumers from unaffordable medical bills, including regulations to control healthcare costs, payment methods, and collection activities. We continue to track medical debt and fair billing policies that build upon these efforts and provide public comments to strengthen current initiatives.

Our advocacy efforts to date include:
  • Support for the Consumer Debt : Medical Debt bill CA SB-1061: (enacted into law on 9/24/24): This law removes medical debt from credit reports and prohibits debt collectors from reporting patients’ medical debt information to credit agencies.
  • Support for the Hospital and Emergency Physician Fair Pricing Policies bill CA AB-2297 (enacted into law on 9/24/24): This law clarifies the definition of charity care and eligibility reviews, bans home liens for eligible patients, allows all cost-sharing deductions, and removes asset considerations. See fact sheet summarizing the bill.
  • Recommendations to the California Department of Health Care Access and Information (HCAI) on their Notice of Proposed Rulemaking regarding changes to the fact sheet summarizing the bill.
    • Hospital Community Benefits Plan Reporting Program. The changes are intended to strengthen reporting requirements.
  • Recommendations to the Federal Consumer Financial Protection Bureau (CFPB) regarding the proposal to amend the Fair Credit Reporting Act to remove medical debt from credit reports..

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    • Public Health has made reasonable efforts to provide accurate translation. However, no computerized translation is perfect and is not intended to replace traditional translation methods. If questions arise concerning the accuracy of the information, please refer to the English edition of the website, which is the official version.

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